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Sources say that the supply of Saudi crude oil to China will decline in July.
Saudi Arabian crude oil supplies to China are expected to drop slightly in July. However, they will still be strong for a 3rd consecutive month, as the OPEC kingpin regains market share by supplying the top crude importer of the world. A tally of the allocations made to Chinese refiners revealed that Saudi Aramco, the state oil company, will ship around 47 million barrels in July. This is 1 million barrels below June's allocated volume. Sources say that state refiners Sinopec and PetroChina, as well as Aramco's joint-venture Fujian refinery, will receive more crude in July. However, independent refiners Rongsheng Petrochemical Hengli Petrochemical Shenghong Petrochemical are likely to see a decrease. Saudi Aramco didn't immediately respond to our request for comment. Saudi Arabia's robust supply is a result of the Organization of Petroleum Exporting Countries (OPEC+) and its allies agreeing to increase output by 411,000 barrels a day in July for a third month running. Since April, OPEC+8 have announced or made increases totaling 1.37 million bpd or 62% the 2.2 millions bpd that they intend to add to the market.
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Markets watch US-China trade talks
Oil prices rose on Tuesday, as investors waited for the results of U.S. China talks which could ease trade tensions and increase fuel demand. Brent crude futures were up 28 cents or 0.4% to $67.32 per barrel at 0330 GMT. U.S. West Texas Intermediate Crude was up 23 cents or 0.4% at $65.52. Brent oil prices rose to $67.19 on Monday, their highest level since April 28. This was boosted by the prospect of a U.S. China trade agreement. The U.S. and China trade talks will continue in London for a second consecutive day as officials try to reduce tensions which have risen from tariffs on rare earths to global supply chain disruptions. Goldman Sachs analysts say that prices have recovered due to the fact that demand concerns have diminished with the trade negotiations between Washington and Beijing, and a positive U.S. employment report. However, there are still risks for North American supply because of wildfires in Canada. Donald Trump, the U.S. president, said that on Monday that he had received "only good reports" about his talks with China from his London-based team. The U.S.-China trade agreement could boost the global economy and increase demand for commodities, including oil. Iran has said that it will soon present a counter proposal for a nuclear agreement to the U.S. as a response to an offer from the U.S. that Tehran finds "unacceptable", whereas Trump stated that both sides remain at odds on whether Iran would be permitted to enrich uranium in its soil. Iran is the third largest producer of oil among the members of the Organization of Petroleum Exporting Countries. Any easing of U.S. sanction on Iran will allow it to export even more oil and this would have a negative impact on the global crude price. A survey also found that OPEC's oil production rose in May. However, the rise was not as large as expected, since Iraq pumped less than the target amount to make up for the earlier overproduction, and Saudi Arabia, the United Arab Emirates and Kuwait increased their output by a smaller amount. OPEC+ - which includes OPEC and its allies, such as Russia - is accelerating the plan to undo its latest layer of production cuts. Daniel Hynes is a senior commodity strategist with ANZ. He said that the prospect of further increases in OPEC's supply still hangs over the market. "A permanent switch to a market-driven strategy (in OPEC), would push the oil markets into a large surplus in H2 of 2025, and almost certainly lead to lower prices."
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UK: Renewables Workforce to Grow to 42,000 In Next Five Years
New research published today by the Engineering Construction Industry Training Board (ECITB) has revealed that the engineering construction industry (ECI) workforce deployed in renewables, hydrogen and carbon capture and storage could total more than 42,000 by the end of the decade.The ECITB’s latest forecast reports that by 2030 the offshore wind workforce could grow to more than 28,000, an increase of 48%, while the CCS sector workforce within the ECI could increase by 144% to more than 3,750.The hydrogen workforce could grow to more than 4,500, an increase of 195%, while the combined workforce across other renewable sectors, including onshore wind, solar, biomass, energy from waste and biofuels, is predicted to grow by 20% to total more than 5,800.Roles most in demand across these sectors will include design engineers, project managers, project controllers, commissioning technicians, general operatives, electrical technicians, platers, pipefitters and mechanical fitters.The analysis was done with ECITB’s Labour Forecasting Tool (LFT), which provides insights into workforce numbers across regions and sectors, predicting trends and potential future demand for workers in the industry.The tool, which was first launched in November 2023, has been updated using findings from the ECITB 2024 Workforce Census and publicly stated timescales on 3,000 active and future ECI projects across Great Britain.The LFT predicts that the biggest increase in demand for workers across the ECI in the next five years will be in the carbon capture and hydrogen sectors.“The significant Census response rate enabled the ECITB to provide more precise, up-to-date data for the benefit of industry. It allows us to improve the LFT to help make better predictions on future workforce trends and labour demands in renewables sectors.“The updates to the LFT reinforce the scale of the challenges facing the industry that were outlined in our Workforce Census Report, which revealed that 81% of renewables employers in the ECI are experiencing challenges hiring workers.“We recognize that addressing skills shortages in these sectors requires a collaborative, multi-agency approach that includes employers, governments, training providers and the ECITB.“So, we’re calling on all of industry to work together to help increase the pool of people joining the ECI, while continuing to train and upskill existing workers.“By investing in the workforce, the industry has a fighting chance of closing the skills gap and ensuring it has the skilled workforce it needs both for now and the future,” said Andrew Hockey, ECITB Chief Executive.
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Iron ore prices continue to fall due to a growing supply, but China's resilient demand is limiting the loss.
Iron ore prices continued to fall on Tuesday. They were dragged down by the expectation of an increase in supply. However, a resilient demand from China, their top consumer, and hopes for easing Sino-US tensions helped limit losses. As of 0215 GMT, the most traded September iron ore contract at China's Dalian Commodity Exchange dropped 0.28% to a metric tonne price of 702.5 yuan (US$97.79). The benchmark July Iron Ore at the Singapore Exchange fell 0.21%, to $94.5 per ton. Data from Mysteel revealed that shipments of the main steelmaking ingredient, mainly from Australia and Brazil, rose nearly 2% compared to the previous week. This was the highest weekly level since December. Analysts at Shanghai Metals Market wrote in a report that iron ore imports are expected to increase in June as mills will use imported cargoes more due to the lower price and miners will increase shipments to meet quarterly targets by June's end. Analysts at Hongyuan Futures wrote in a report that "given the healthy steel margins, hot metal production is likely to be at a high-level." Mysteel data shows that the hot metal production is a good indicator of iron ore consumption. The daily average was 2.42 million tonnes on June 5, which was 2.6% more than a year earlier. Investors are also hoping that top U.S. officials and Chinese officials will improve their relations during a second round of trade discussions in London, on Tuesday. Coking coal and coke, which are used in the steelmaking process, both saw gains of 0.32% and 0.4%, respectively. The benchmarks for steel on the Shanghai Futures Exchange were traded within a narrow range. Rebar gained 0.1%, hot-rolled coil advanced 0.16% and wire rod increased by 0.12%, while stainless steel declined by 0.79%. Reporting by Amy Lv & Lewis Jackson. $1 = 7.1839 Chinese Yuan
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London copper prices slightly ease as US-China discussions are in focus
London copper prices dipped marginally on Tuesday as the market watched closely the progress of the ongoing trade negotiations between the two world's largest economies, which are taking place in London. The London Metal Exchange's three-month contract for copper fell 0.3%, to $9,761.5 a metric ton, by 0101 GMT. Meanwhile, the Shanghai Futures Exchange's most traded copper contract gained 0.6%, to 79.160 yuan ($11,024.76) a tonne. Tuesday's U.S. China trade talks will continue into the second day. Washington and Beijing are attempting to resolve a bitter dispute, which has expanded from tariffs to restrictions on rare earths. This is threatening to cause a global economic slowdown and supply chain disruption. The Trump administration is ready to lift a recent flurry of measures that targeted ship design software and jet engine parts. It also targets chemicals and nuclear material. Markets were encouraged by the apparent cooling in trade tensions. This offset fears that the trade conflict is having a negative impact on economic activity," ANZ stated. Copper Stocks In LME-registered storage warehouses, the amount of copper dropped by 10,000 tons to 122 400 tons on Monday, indicating that the shipment has continued despite the threat of U.S. import tariffs. Other LME metals include aluminium, which fell by 0.2% to $2473.5 per metric ton. Zinc also declined, falling 0.1% to 2,647. Tin dropped 0.3% to 32,605, while nickel declined 0.4% to $16,355. Zinc, among the other SHFE metals, continued to weaken. It lost 1.2%, or 21,870 Yuan. Nickel fell by 0.9%, or 121,640 Yuan per ton. Lead gained 0.8%, to 16,860 Yuan. Tin gained 0.3%, to 263,550 Yuan. Click or to see the latest news in metals, and other related stories. DATA/EVENTS (GMT) UK HMRC May Payroll Changes ($1 = 7.1802 Chinese Yuan) (Reporting and Editing by Sumana Niandy; Reporting by Hongmei LI)
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Dollar tepid ahead of US-China talks
The dollar was on alert on Tuesday, as the United States and China continued their trade negotiations for a second consecutive day. There were some tentative signs that tensions could be easing between the two world's largest economies. The U.S. president Donald Trump gave a positive spin to the discussions at Lancaster House, London. They ended for the evening on Monday but were scheduled to resume at 9am GMT on Tuesday. The fact that the market is still near record highs suggests that the market has accepted what Trump said. When you consider the comments of Lutnick and Bessent it appears to me that they're relatively satisfied with the progress," said Tony Sycamore. The market likes to hear concrete news. Investors have been focusing on the progress of talks as Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick, along with U.S. trade representative Jamieson Greer, were about to meet their Chinese counterparts for the second time. Markets will likely be relieved if the talks progress, given that Trump's tariffs have been chaotic and the swings in Sino/U.S. relations have hampered global growth. In Asia, stocks advanced further than they had at the beginning of the week. Nasdaq's futures rose 0.62%, while MSCI's broadest Asia-Pacific index outside Japan gained 0.5%. S&P futures rose 0.43%. Both the FTSE and EUROSTOXX futures added about 0.1% each. After hearing that Japan was considering purchasing some of the super-long government securities issued at low rates in the past, the Japanese bond market also received attention. Early trade saw the yield of the 10-year JGB drop one basis point, to 1.46%. The 30-year yield fell 5 bps, to 2.86%. Last month, yields on super-long JGBs reached record levels due to the waning demand from traditional investors such as life insurance companies and concerns over rising global debt levels. Justin Heng is a rates strategist for HSBC Global Investor Research in APAC. He said that the volatility of the super-long segment stems from a supply/demand imbalance which has been brewing ever since the BOJ began to normalise its balance sheet. Katsunobu Kato, the Japanese Finance Minister, said that on Tuesday he would implement appropriate debt management strategies while working closely with market participants. After falling on Monday, the dollar tried to gain ground in currencies. The dollar rose 0.45% against the yen to 145.25. The euro dropped 0.28%, to $1.1387. Sterling fell 0.2%, to $1.3523. Investors' confidence in U.S. assets has been eroded by Trump's unpredictable trade policies, and concerns over Washington's increasing debt. The dollar is down more than 8% this year. The greenback's next test will come on Wednesday when the U.S. Inflation data is released. The expectation is that core consumer prices will have increased slightly in May. This could put a halt to bets on imminent Federal Reserve rate reductions. The report on the producer price index will be published a day after. Kevin Ford, Convera’s FX and macrostrategist, said that the May CPI and PPI figures in the United States will be closely examined for any signs of inflationary pressures. If core CPI continues to be elevated, rate cuts may not occur at the FOMC meeting on June 18. The Fed is expected to hold rates at its next policy meeting, but traders have priced in roughly 44 basis points of rate easing for December. Brent crude futures gained 0.24%, to $67.20 per barrel. U.S. West Texas Intermediate Crude was last up 0.25 percent at $65.45 a barrel, after reaching a session high of more than two months earlier. Spot gold dropped 0.5% to $3.310.40 per ounce.
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Gold drops as traders monitor US-China trade talks at London
Market participants were waiting for further developments in ongoing U.S. China trade talks, which are now entering their second day. As of 0125 GMT, spot gold dropped 0.5% to $3311.16 per ounce. U.S. Gold Futures fell by 0.7%, to $3330.90. The high-level talks between U.S. officials and Chinese officials have extended into a second session, with topics ranging from rare earth restrictions to tariffs. Tim Waterer is the chief market analyst for KCM Trade. He said that "with these important U.S. China trade talks still underway, gold is currently trading cautiously" until we can see if there is any progress between the two superpowers. U.S. president Donald Trump noted that his administration is "doing very well" in negotiations. Both sides agreed last month to temporarily pause tariffs. This provided some relief for the financial markets. If traders believe that U.S. and China are on track for a wider trade agreement, the demand for safe-haven assets like gold may ease. China's data showed that export growth in May slowed down to a 3-month low as U.S. Tariffs affected shipments. Factory-gate deflation also reached its highest level in the past two years. Investors are waiting for Wednesday's U.S. Inflation data to get more clues about the Federal Reserve's policy. Waterer stated that "if CPI ticks higher, that is expected, but if CPI jumps, that may raise alarm bells among investors and any flight to safety that results could boost the gold price." When interest rates are low, gold tends to perform well. Other than that, silver spot was down 0.6% at $36.51 an ounce. Platinum fell 0.8% to 1,210.46 and palladium dropped 0.2% to 1 071.75. (Reporting and editing by Rashmi aich in Bengaluru, Anmol Choubey)
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US-China Trade Talks to Resume for a Second Day
Tuesday in London, top U.S. officials and Chinese officials are expected to resume their trade negotiations for a second time. They hope to achieve a breakthrough on export controls of goods like rare earths which have caused a global supply-chain shock and slowed economic growth. Investors hope that the two superpowers will improve their ties. The relief brought by the preliminary trade agreement reached in Geneva last week has given way to new doubts. Washington accuses Beijing of blocking critical exports to industries such as autos, semiconductors, and defence. The talks take place at a critical time for both economies. Customs data shows that China's exports into the U.S. dropped by 34.5% in may, the biggest drop since February 2020 when the COVID-19 virus pandemic disrupted global trade. The dollar is still under pressure by U.S. policies, even though the impact has been minimal on U.S. jobs and inflation. Both sides will be expected to provide updates on both Tuesday and Wednesday. On Monday, the two sides met in the elegant Lancaster House of the British capital to discuss their disagreements regarding the Geneva agreement. The U.S. delegation is led by U.S. Treasury Sec. Scott Bessent and Commerce Sec. Howard Lutnick, while Vice Premier He Lifeng leads the Chinese delegation. Lutnick's inclusion, whose agency is responsible for export controls in the U.S.A., shows how important rare earths are. China has a near monopoly on rare-earth magnets. These are crucial components in electric vehicle motors. Lutnick didn't attend the Geneva negotiations where the countries reached a 90-day agreement to reduce some of the triple-digit trade tariffs that they had imposed on each other. Trump's often erratic tariff policy has caused global market turmoil, caused congestion and confusion at major ports and cost companies billions in lost sales. The second round of talks between the two parties comes four days after Trump spoke with Xi by phone. It was their first direct contact since Trump's inauguration on January 20, 2017. After the call, Trump reported that Xi agreed to resume shipments of rare earths minerals to the U.S. and reported China had granted temporary export licences to rare-earth supplier of the three largest U.S. automobile manufacturers. The tensions over export controls remain high, as factories across the globe worry that they will not have enough materials to continue operating. (Reporting and editing by Alistair Bell; Kate Holton)
Brazil oil workers to strike in protest of Petrobras' austerity measures
The Brazilian federation for oil workers (FUP) announced a two-day strike warning against Petrobras, the state-owned oil company, on Thursday. "In protest at the stagnation in the negotiations with the company," a statement said.
The oil giant has pledged to implement austerity measures in response to lower oil prices.
Petrobras reported earlier this week a first-quarter earnings.
Net profit
The firm said it would need to reduce its investment by 35.2 billion reais (6.25 billion dollars) if Brent crude oil prices fall.
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FUP stated that "dissatisfaction grew after statements made by Petrobras Chief Executive Magda Chambriard, signaling plans to contain expenses, despite the positive financial performance of the company,"
Petrobras’ variable compensation plan, and its cost-cutting policies that FUP called "incoherent", are the main issues of negotiation between the union and company.
Petrobras didn't immediately respond to an inquiry for comment.
(source: Reuters)